Fintech

BlackRock Launches Industry’s First BuyWrite Fixed Income ETFs

BlackRock Launches Industry’s First BuyWrite
BlackRock today launched a first-of-its-kind suite of fixed income ETFs that provide access to buy-write investment strategies on baskets of fixed income securities: the iShares 20+ Year Treasury Bond BuyWrite Strategy ETF, iShares High Yield Corporate Bond BuyWrite Strategy ETF and the iShares Investment Grade Corporate Bond BuyWrite Strategy ETF. Each ETF packages two potential income sources into one ticker – premiums generated by selling monthly call options on the underlying ETFs and the yields from each of the underlying ETFs themselves.

“The iShares’ bond ETF platform has the world’s largest, comprehensive toolkit1 for individuals and institutions by providing access to the $124 trillion fixed income market with essential building blocks for a wide variety of macroeconomic climates, Market participants have used a buy-write strategy on equities since options were first listed more than 50 years ago. The iShares Bond BuyWrite ETFs introduce these capabilities to fixed income, pioneering new possibilities for an asset class sitting at the center of so many long-term portfolios.”

- Carolyn Weinberg, Global Head of Product for ETF and Index Investments, BlackRock

Helping Investors; Capital Markets Innovation

The iShares BuyWrite ETFs aim to increase yield potential for investors, debuting during the most challenging environment for fixed income in decades due to inflation, hawkish central banks and interest rate volatility.

Each iShares BuyWrite ETF seeks to track a designated index from Cboe Global Indices by owning shares of the underlying ETF and selling one-month call options at a strike price at or near the closing price of the ETF the day before the strategy writes the call options. Each month, the iShares BuyWrite ETFs will distribute to shareholders both the call option premiums collected and the underlying funds’ monthly distributions.

TLT, HYG and LQD have grown into important financial instruments in the fixed income markets and have some of the most liquid options markets of any ETF2, Our buy-write exposures expand the functionalities of bond ETFs by unlocking a sophisticated use case with a potential to enhance income for investors in this volatile yield environment, said Stephen Laipply, U.S. Head of Bond ETFs at BlackRock.

BlackRock pioneered bond ETFs in 2002 with the launch of four products and this space has since grown 23% annually into a $1.7 trillion industry with more than 1,400 offerings.3 Over 20 years, bond ETFs have become fundamental to fixed income investing and BlackRock estimates they will reach $5 trillion in AUM by the end of the decade.

About BlackRock
BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable.

About iShares
iShares unlocks opportunity across markets to meet the evolving needs of investors. With more than twenty years of experience, a global line-up of 900+ exchange traded funds (ETFs) and $2.78 trillion in assets under management as of June 30, 2022, iShares continues to drive progress for the financial industry. iShares funds are powered by the expert portfolio and risk management of BlackRock.

Spotlight

Digitalization is not new. It has just meant different things throughout the years, as we made the shift from typewriter to computer, from fax to email. Every technological evolution marks an uptick in productivity and performance. And the most successful and resilient businesses make sure they are ready to accept the challenge

Spotlight

Digitalization is not new. It has just meant different things throughout the years, as we made the shift from typewriter to computer, from fax to email. Every technological evolution marks an uptick in productivity and performance. And the most successful and resilient businesses make sure they are ready to accept the challenge

Related News